Mr. MARKET Nasdaq's master promoter trades on his vision of future

Joe Hardiman has a clear vision of the world's stock markets -- and it doesn't include chaotic exchange floors where traders shout their orders.

The future, he says, is the Washington-based Nasdaq stock market. Eventually, all but the dinosaurs of the last industrial revolution will list their stocks on that system, Mr. Hardiman predicts, to benefit from its computerized services and thoroughly modern image.

He has honed that message in countless speeches. Now, armed with a multimillion-dollar ad budget and slick television commercials, Mr. Hardiman has become Nasdaq's master promoter.

And his vision may just be right.

Under the stewardship of the 56-year-old Baltimorean, Nasdaq has grown from a relatively obscure trading system of small-company stocks into one of the world's largest stock markets. Today, it trails only the New York Stock Exchange in dollar trading volume, and with high-powered listings such as Microsoft Corp., Nasdaq poses the first serious challenge to the venerable New York exchange.

Throughout the transition, Mr. Hardiman has overseen Nasdaq's push to regulate its market of 4,300 stocks and has helped publicize every success.

"He's . . . worked hard to tell not only investors but the whole world about the Nasdaq system. He's realized the potential of the Nasdaq system," said Hans Stoll, director of the Financial Markets Research Center at Vanderbilt University.

But as Mr. Hardiman completes the remaining years of his tenure, Nasdaq is attracting criticism, too.

Critics charge that Nasdaq's computerized trading system hurts investors because it gives preference to the Wall Street firms that buy and sell its stocks. For small investors, it's much harder to obtain the best price on Nasdaq than on the exchanges, and the winners in Nasdaq trades often are the companies that act as intermediaries on the system, critics say.

The debate over Nasdaq's future has intensified recently, as the federal government wraps up a study that could recommend far-reaching changes in regulating U.S. stock markets. If the study comes down on Nasdaq's side, the stock exchanges could be threatened. But if Nasdaq's way of selling stocks is curbed for its alleged biases, Nasdaq's challenge -- and Mr. Hardiman's ambitious plans -- could be thwarted.

Mr. Hardiman seems more a blue-chip lawyer than stock market revolutionary. But his quiet, self-assured manner hides a tougher edge.

At the University of Maryland Foundation, for example, Mr. Hardiman heads the audit committee and grills staff members annually on the $100 million organization's finances. "He has a very dry sense of humor, and while I appreciate his humor, after he gets through with us, I want to take a week's vacation. He's tough," the foundation president, John Martin, said.

The former securities lawyer had a similar reputation at Baltimore-based Alex. Brown & Sons Inc., where he rose to chief operating officer and earned respect as a no-nonsense administrator.

"He ran a very tight ship during his 12 years with Alex. Brown. He was firm, fair and serious," said J. Carter Beese, an SEC commissioner and former Alex. Brown partner.

That toughness was tested soon after Mr. Hardiman left the firm to lead the National Association of Security Dealers, parent of the Nasdaq market. Just weeks after he arrived in 1987, the stock market crashed, and Nasdaq suffered a public relations disaster.

Customers claimed that Nasdaq market makers -- the intermediaries who handle trades -- refused to fill orders as market values plummeted on Oct. 19. That left many investors holding devalued stocks that they had been trying to sell.

That criticism was a strong challenge to Nasdaq, a system that had gone from trading 2 billion shares in 1971 to 37.9 billion in 1987. Unlike stock exchanges, with their busy trading floors and specialists who execute stock orders, Nasdaq has no trading floor, just a computer network that shows what market makers are offering for a stock. Investors buy or sell from the market makers, not each other.

Mr. Hardiman took steps, however, to restore some of that lost confidence by automating the execution of small trades and by forcing market makers to sell or buy up to 1,000 shares of stocks at the listed price. The new rules were designed to help guarantee that small investors would not be trampled by institutional investors and that market makers would give priority to clients rather than personal stock accounts.

Such moves shored up Nasdaq's credibility, just as the markets boomed in the late 1980s. Nasdaq continued to grow in volume -- $891 billion was traded last year, a dollar volume second only to the New York Stock Exchange's $1.8 trillion.